Funding story:

Definition was founded in 2007 to be a highly regarded national B2B PR agency, delivering services that are valued by our clients and providing rewarding careers (not just jobs) for our people.

Establishing an Academy was an early innovation, offering work experience and internships for school leavers and graduates as well as ongoing training and personal development programmes for staff.

As measures of success, the agency has won over 70 regional, national and international awards for its work and three of our senior executives are not only long-serving members of the team but have also been widely recognised as leaders in their fields of expertise. Louise Vaughan joined the agency at the outset, working her way up to her current position as Managing Director, and was recently listed in the prestigious PR Week Power Book 2021 as one of the most influential and respected communications professionals in the UK today. Two of our Account Directors, Ellie St George-Yorke and Rebecca Jackson, have been with the agency for a combined 18 years and have both been named as regional Young Communicators of the Year.

How has the business changed in recent years?

"The agency’s 14 year history has encompassed three prolonged periods of uncertainty and challenge for the marketing services sector - a 5 year recession, following the financial crash and credit crunch of 2008, a 4 year period of fluctuating confidence following the Brexit referendum in 2016 and the dramatic impact of covid-19 in 2020 and 2021.

Against these various economic backdrops, the agency has adapted to both survive and thrive.

Key objectives during the pandemic were to keep the team together, so that the business was well-positioned to take advantage of the eventual upturn, and to maintain the agency’s focus on the mid-term strategy. A fundamental pillar of this strategy is to create more resilience in the business by broadening and deepening the agency’s range of services and sector specialisms and by building scale, all within a reasonably short timeframe.

This will be achieved, not just by organic growth but through the successful execution of a clearly-defined buy-and-build strategy. This is now well under way with three acquisitions completed in the six months from October 2020 to March 2021, tripling revenues on an annualised basis, and with other targets in the pipeline.

Definition is already established as a leading independent B2B agency in the UK with its ambitions and reputation being recognised. It has recently been selected as one of PR Weeks’ 12 to watch in 2021 and listed as one of 15 rising stars in B2B Marketing UK Agencies Benchmarking Report 2021."

How do you see the future of the business?

"Definition’s goal is to pursue its strategy, grow the business four or five-fold over the next few years, improve margins, expand the international footprint, enhance career development opportunities for its people and establish a leadership position across the broader marketing communications sector.

The acquisition programme will continue. It will deliver most value if the new agencies are integrated effectively and if the individual teams are operating as one. This has been the approach from the beginning with highly talented people being encouraged and enabled to work together, combining different but complementary services into creative and innovative offerings for clients.

There is a real opportunity to differentiate the agency by giving clients the best of both worlds, offering the skills and experience of a much larger agency whilst operating with the entrepreneurial flair and flexibility of a boutique. Most importantly, services will be integrated and will always be delivered by an “A team”.

The principal challenge to the successful execution of the strategy will be the availability of sufficient agencies that meet the acquisition criteria in our two chosen hub cities of Leeds and London, that present a good cultural fit and that have the right calibre of ambitious people with a shared vision of the future."

Funding:

When did you start thinking about funding?

"Funding was first considered when the buy-and-build strategy was being developed during 2018."

Why do you think external funding is so important?

"External funding is not only important but essential for a buy-and-build strategy as sufficient funding could not be generated from internal sources within a reasonable timescale. Furthermore, the need to build financial resilience, a key driver of the strategy, leaves a smaller business exposed to the vagaries of economic headwinds and other unpredictable crises, without it."

How will it help you to achieve your goals?

"External finance, in combination with the issue of new equity, provides the funding to execute the acquisition programme and thereby deliver on the strategy."

What were you looking for in a potential funder?

"As a relatively small, people-based business with few tangible assets, Definition fell into the classic equity gap, unable to raise funds through new share issues on a cost-effective basis without heavy dilution to the interests of existing shareholders and unable to borrow money on a secured basis.

What was needed, was a funder with a commercial outlook, that understood small businesses, both in terms of the issues they face and the opportunities they offer, that would evaluate and support the business strategy and then lend on the strength of the cash flow that the business was and should be capable of generating."

Why did you choose ThinCats vs other funder you may have considered?

"ThinCats not only met Definition’s needs but was also very commercial in its approach. From the outset, it was clear that ThinCats understood and appreciated the acquisition methodology and that they were interested in, and were willing to back, the buy-and build strategy as a whole, not just individual acquisitions.

Whilst each acquisition needs to stand on its own merits, it is extremely helpful to know that funding should be available, if specified criteria are met, as it provides a confident backdrop to conversations and negotiations with potential targets."

How did we meet your requirements?

"So far, ThinCats have lived up to expectations and, importantly, delivered on their promises, having agreed to fund our first three acquisitions within a relatively short space of time. There has been no suggestion, as might reasonably have been expected, that the first acquisition should be allowed to “bed-in” before progressing to a second, never mind a third. This has enabled us to make good progress with our strategy without being unnecessarily slowed-down.

As an organisation they are very approachable, easy to deal with and pragmatic, focusing on the substance rather the form of transactions and documentation, making the whole process from initial appraisal of an application for specific acquisition funding to the approval and documentary formalities as smooth and efficient as possible.

We would have no hesitation in recommending ThinCats as a source of funding for other SMEs."

We have an ambitious growth strategy for Definition which is centred on identifying and leveraging complementary service lines that add significant value to our clients and our business. We were not only attracted by the fantastic pedigree of W&P but the people within the business who share our passion for delivering services that are not only valued by our clients but highly rewarding for our people. We now look forward to making our combined aspirations a reality

Nigel Howes, Chairman of Definition Agency Group